10 Oversold Stocks Seeing Bullish Sentiment On Twitter

By now, everyone's heard of hedge funds using Twitter sentiment analysis to come up with trading ideas.

The idea is simple yet powerful. Social media platforms like Twitter create massive amounts of data on real-time sentiment. If you can filter out the noise (and Justin Bieber fans), you could find some interesting trading ideas from the 250M+ daily tweets.

From Reuters:

"It won't make you a millionaire overnight, but it does work," said Richard Gardner, president and CEO of Modulus Financial Engineering, which amasses historic Twitter data for hedge funds and research firms to crunch. "The markets are moved by emotion, and I think this is going to be the future of trading. You can actually see global moods moving up and down in real time."

There have also been several academic papers suggesting that tweets could be correlated with stock market performance. John Bollen, for example, recently submitted a paper suggesting Twitter mood states could be used to predict the daily up and down changes in the DJIA.

What's more, they claim an accuracy of 87.6% in their model. You can find the complete paper here.

To explore this topic, we've built our own sentiment analysis technology, built specifically to analyze the tweets that contain specific ticker mentions (e.g. Apple (NASDAQ:AAPL) is tagged as $AAPL, a common practice on Twitter to tag tweets on specific companies).

To compile the list below, we crunched sentiment data on about 21K Tweets mentioning 2450 specific stock tickers, all from Friday's trading session. (Note: If you want to access the raw data used to compile these stats, send us a message with your email address, and we'd send you the excel file that contains all the analytics.)

For this article, we wanted to focus on oversold stocks, as defined by the RSI(14) indicator, that have seen bullish sentiment on Twitter during Friday's trading session.

Twitter users are turning bullish on these oversold stocks. Do you agree that these are good rebound candidates?

Do you even think Twitter sentiment trends can be useful for stock market analysis? Let us know in the comment section below.

List sorted by the RSI(14) indicator.

1. Apollo Group Inc. (NASDAQ:APOL): Provides educational programs and services at the undergraduate, master's, and doctoral levels. On Friday, there were 13 tweets mentioning the company, of which 6 were positive and 0 were negative (i.e. net sentiment +6). RSI(14) currently at 27.76.

2. Thompson Creek Metals Company Inc. (TC): Engages in mining, milling, processing, and marketing molybdenum products in the United States and Canada. On Friday, there were 7 tweets mentioning the company, of which 6 were positive and 0 were negative (i.e. net sentiment +6). RSI(14) currently at 32.95.

3. Goodyear Tire & Rubber Co. (NYSE:GT): Engages in the development, manufacture, distribution, and sale of tires, and related products and services to consumer and commercial customers worldwide. On Friday, there were 16 tweets mentioning the company, of which 7 were positive and 1 was negative (i.e. net sentiment +6). RSI(14) currently at 34.99.

4. Dynegy Inc. (NYSE:DYN): Engages in the production and sale of electric energy, capacity, and ancillary services in the United States. On Friday, there were 20 tweets mentioning the company, of which 10 were positive and 1 was negative (i.e. net sentiment +9). RSI(14) currently at 36.23.

5. United Online, Inc. (NASDAQ:UNTD): Provides consumer products and services over the Internet, primarily in the United States and internationally. On Friday, there were 8 tweets mentioning the company, of which 6 were positive and 0 were negative (i.e. net sentiment +6). RSI(14) currently at 36.7.

6. First Solar, Inc. (NASDAQ:FSLR): First Solar, Inc. manufactures and sells solar modules using a thin-film semiconductor technology. On Friday, there were 39 tweets mentioning the company, of which 11 were positive and 0 were negative (i.e. net sentiment +11). RSI(14) currently at 39.34.

7. Acme Packet, Inc. (NASDAQ:APKT): Provides session delivery network solutions that enable the delivery of interactive communications, such as voice, video, and multimedia sessions; and data services across internet protocol (IP) network borders. On Friday, there were 15 tweets mentioning the company, of which 9 were positive and 1 was negative (i.e. net sentiment +8). RSI(14) currently at 39.43.

8. Consolidated Edison Inc. (NYSE:ED): Provides electric, gas, and steam utility services in the United States. On Friday, there were 36 tweets mentioning the company, of which 9 were positive and 1 was negative (i.e. net sentiment +8). RSI(14) currently at 40.64.

9. Sequenom Inc. (NASDAQ:SQNM): Provides products, services, diagnostic testing, applications, and genetic analysis products that translate the results of genomic science into solutions for biomedical research, translational research, molecular medicine applications, and agricultural and livestock research. On Friday, there were 22 tweets mentioning the company, of which 8 were positive and 1 was negative (i.e. net sentiment +7). RSI(14) currently at 42.71.

10. NVIDIA Corporation (NASDAQ:NVDA): Provides visual computing, high performance computing, and mobile computing solutions that generate interactive graphics on various devices ranging from tablets and smart phones to notebooks and workstations. On Friday, there were 18 tweets mentioning the company, of which 5 were positive and 0 were negative (i.e. net sentiment +5). RSI(14) currently at 42.83.

For any easy way to compare analyst ratings on these stocks, click here.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.